Nearby state appellate court rules in contract disputes case

On behalf of Burkhalter Kessler Clement & George LLP posted in Contract Disputes on Thursday, July 20, 2017.

Disagreements between California business partners are not uncommon. In fact, sometimes contract disputes occur before deals are actually finalized. Other times, parties who sign agreements may wind up in disputes if one or more of the parties believe someone has breached an agreement.

This is basically what happened between two pipeline giants, Enterprise Products Partners (EPP) and Energy Transfer Partners (ETP). In one recent federal lawsuit, after the trial court handed down a $535 million judgment against EPP, the company filed an appeal, and won. Some say many eyes were on this particular case as the results were to set a precedent regarding when a contract becomes legally binding in that state.

In this situation, all parties had signed an agreement on the dotted lines to do business together. EPP later decided to enter a deal with a Canadian pipeline company instead, due to better customer support in that particular deal. ETP was not happy that EPP walked away from their agreement. However, it's the fine print of their written contract to which the appellate court paid closest attention, because that's where it clearly stated that the terms of the contract were not definitive unless board approval was obtained and appropriate documentation for a finalized project was attached.

The Fifth Circuit Court of Appeals reversed the lower court ruling, which would have amounted to well over $600 million with interest. EPP's attorney said that had the appellate court ruled against the company, it may have set a disastrous business law precedent that companies could be ambushed into partnerships. Those facing unresolved contract disputes in California (or those who are dissatisfied with a recent ruling in their case) may wish to explore litigation options by discussing the matter with an experienced business and commercial law attorney.

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